Standard Life v Equitable Life

By THIS IS MONEY
Updated:

 

I have been paying £100 per month into a with-profits pension with Equitable Life. The current transfer value is £3,365. I am 38, self-employed and a basic rate taxpayer. What do you recommend I do? I have cancelled payments at the moment. I was advised by an independent financial adviser (IFA) to go with Standard Life, but have read reports that they may have similar GAR problems as Equitable. DB, Stoke.

Lee Robertson, independent financial adviser at The Investment Quorum says: This is a very difficult issue at the moment with the Equitable situation still very fluid. Whilst the first part of the Halifax deal has been done the second part is dependent on the GAR situation being resolved to the satisfaction of all parties. This is by no means a certainty.

It is for this reason that most IFAs are recommending that clients divert premiums to another provider in the meantime, particularly if clients wish to continue with a with-profits investment strategy.

It is true that other companies have GAR issues to contend with but no provider seems to have gone as far down the GAR route as Equitable and others do not seem to have accrued as high a level liabilities on their with-profits funds as Equitable. I can understand why Standard Life, as Europe's largest mutual, has been recommended by your IFA. You have obviously been attracted to a mutual before and a financially sound mutual makes a lot of sense.

Most watched Money videos